Karachi, March 13, 2025 – The State Bank of Pakistan (SBP) has reported a decline in its official foreign exchange reserves, as external debt payments continued to weigh on the country’s financial position.
According to the latest data released by SBP on Thursday, the central bank’s reserves fell by $152 million over the past week.
As of March 7, 2025, the official reserves held by SBP stood at $11.098 billion, down from $11.250 billion recorded on February 28, 2025. The SBP attributed this decline primarily to scheduled external debt repayments made by the government. Despite this drop, SBP remains hopeful about future inflows, particularly from international lending institutions.
The International Monetary Fund (IMF) and Pakistan’s economic team are currently engaged in discussions regarding the release of the second tranche of the $7 billion Extended Fund Facility (EFF). If negotiations are successful, Pakistan is expected to receive $1 billion, which will provide a much-needed boost to SBP’s reserves.
While SBP’s reserves saw a decline, the foreign exchange reserves held by commercial banks rose significantly. The latest figures show that commercial bank reserves increased by $207 million, reaching $4.831 billion as of March 7, 2025, compared to $4.624 billion a week earlier.
Analysts attribute this surge in commercial banks’ reserves to a notable rise in workers’ remittances and export receipts. According to SBP data, remittance inflows jumped 32.5% during the first eight months (July–February) of fiscal year 2024-25, totaling $24 billion, a substantial increase from $18.1 billion recorded in the same period last year.
In February 2025 alone, workers’ remittances amounted to $3.1 billion, marking a 38.6% year-on-year (YoY) increase compared to February 2024. Additionally, on a month-on-month (MoM) basis, remittances increased by 3.8% from January 2025. These inflows have played a crucial role in supporting Pakistan’s overall reserves, helping to offset some of the impact of debt-related outflows.
Despite the pressures on SBP’s reserves, Pakistan’s total net foreign exchange reserves recorded a marginal increase of $55 million, reaching $15.929 billion as of March 7, 2025, compared to $15.874 billion a week earlier. This reflects a balancing effect between external debt payments and incoming remittances.
The SBP continues to monitor foreign exchange reserves closely, as economic stability remains dependent on securing external funding and sustaining remittance inflows. The upcoming IMF tranche will be critical in stabilizing Pakistan’s reserves and ensuring financial resilience in the months ahead.